April 1999 ----- -----------------Volume 9, Issue 2

Table of Contents

Home Buyer Workshops Scheduled The State Budget: Late Again New City Lien Sale Scheduled Community Reinvestment Act Under Congressional Attack Predatory Lending A First Time Home Buyer's Workshop

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The State Budget: Late Again (so it’s still not too late to send your thoughts to Albany)
The state has once again missed the April 1 budget deadline. The Governor’s budget proposal and the Assembly and Senate budget resolutions do not yet even agree how much money there is to spend; additionally, there is not agreement on how to proceed to resolve the differences and the budget. Last year, the Senate and Assembly formed a conference committee to resolve differences, but then the governor vetoed many of the legislators’ compromises. This year, the Senate would like to involve the Governor in the conference negotiations, but the three parties have yet to agree on any process.
This means that it is not too late to offer your thoughts to the state’s elected officials on the budget. Here are a few highlighted budget areas pertinent to the work UNHP is doing:
Welfare: The Community Food Resource Center reports that the Governor proposed four welfare cuts: a) undoing the Jiggetts Court decision which permits families facing eviction to qualify for additional rental assistance; b) full family sanctions for work rule violations (current rules sanction only the parent’s share); c) full family sanctions for violations of the child support cooperation rules, and d) learnfare expansion to children in grades 7-12 with sanctions for unexcused absences. The Assembly’s budget resolution rejects the Governor’s proposal to eliminate Jiggetts, while the Senate supports it. Neither house addresses the other proposals.
Child Care: The Governor calls for an additional $120 million in childcare subsidies, creating 13,000 new child care slots. At the same time his budget also seeks to eliminate some early childhood programs and cuts back spending on others including the universal pre-k programs he strongly supported last year.
Housing: The Governor proposes maintenance of funding levels for most state housing programs in the current year; that amount was not deemed acceptable by many in the housing community in the past. The New York Housing Conference has been working with the legislature to try to expand the State Housing budget by doubling support for the Affordable Homeownership Development Program and the State Housing Trust Fund to$50 million in each; and by funding the following: a)$15 million for the Turnkey Program; b)$25 million for both a new middle income program and local anti-abandonment activities; c) $20 million for a new elderly and assisted living program; and d)$15 million for permanent housing for the homeless.
Medicaid: The Governor calls for a $266 million reduction in state spending for medicaid, primarily b cutting funds to hospitals, nursing homes and home care providers. The Senate opposes new cuts; the Assembly restores past cuts.
School Aid: The Governor proposes cutest to the Tuition Assistance Program and changes the income eligibility so fewer students would qualify; it would also reduce the award to students who do not take a full course load, which is expected to hurt students who work and take fewer courses.
The Legislature re-convenes on April 12th; to register your opinions, contact:
Governor Pataki Executive Chamber, Albany, NY 12224 Assembly Speaker Sheldon Silver and your local assemblyman, NYS Assembly, Albany, NY 12248 Senate Majority Leader Joseph Bruno and your local senator, NYS Senate, Albany, NY 12247

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New City Lien Sale Scheduled:
The City has published a listing of tax liens it is planning to sell on May 24, 1999. The complete list of properties on the list was published on March 16th in the Daily News and is available for review at the City Register office in the Bronx at 1932 Arthur Avenue, 3rd floor. If you dispute the listing of your property in the sale, the Dept. of Finance advises you to contact the Tax Lien Ombudsman at (718) 694-0424.
Lien Sales-Third Party Transfer Reviewed: In 1996, the City Council passed legislation to authorize the sale of tax liens and the transfer of back tax encumbered buildings to third parties without intervening city ownership. While the lien sales started quickly, the third party transfer aspect of the city’s policy has been very slow to be enacted. The City is currently on the verge of completing the first transfers in a tax section in the South Bronx. The responses to the RFQ (Request for Qualifications) for third parties are currently being reviewed. The legislatively mandated, stringent timetable (8 months plus an intervening 45 days for City Council review of the proposed third parties) for completion of transfer may have been addressed through the Enterprise and LISC sponsored entity—Neighborhood Restore, which will be able to take title of the properties on an interim basis and then transfer the properties to the ultimate third parties. There are still a large number of unanswered questions about the transfers including the amount and source of renovation money and acquisition charges. The effectiveness of the lien sales was reviewed in the first 1999 issue of the Citizens Housing and Planning Council (CHPC, 212-286-9211) newsletter, the Urban Prospect as part of an overall review of City Housing Policy since October, 1995. (Notes recommends the issue entitled "Preservation Issues Clarify", Jan/Feb l999 as a good overview of housing policies and practices in the current administration.) CHPC reviews the status of collections from the original l996 lien sale. They report that approximately 56% of the liens were fully paid, 12% were paying installment agreements, and approximately 26% were in some stage of foreclosure. The first foreclosure auctions took place in late l998. The impact on the buildings has not been evaluated as of this time. CHPC concluded that no meaningful conclusions could be drawn about the physical conditions of the lien sale buildings by analyzing code violations. Later in the CHPC analysis of City housing policy, they devote time to reviewing the status of city code enforcement. This review provides the probable reason for the inability to draw conclusions based on violation information. CHPC reports that the City’s Code Enforcement teams were reduced from 215 in l989 to 78 in l997. As a result completed inspections fell by nearly 67% and violations fell by more than half. Notes will follow up on the status of the third party transfer in upcoming issues.

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Community Reinvestment Act (CRA) Under Congressional Attack:
The Community Reinvestment Act of 1977 (CRA) has been one of the major tools used to preserve and improve the Bronx and other communities around the country. In the past 22 years, CRA is credited by the National Community Reinvestment Coalition with leveraging $1 trillion in community reinvestment around the country. The Congressional debate on financial modernization has opened a new round of debate about the Community Reinvestment Act. Supporters and foes of CRA have raised issues related to CRA in the debate about Financial Modernization legislation. Supporters of CRA are concerned that the mega financial institutions that will be created will continue the movement of resources into entities that are not covered by the Community Reinvestment Act. They support an expansion of CRA to cover the affiliates that will be part of bank holding companies. Foes of CRA are taking the opportunity to try to weaken CRA. The Senate Banking Committee chaired by Senator Gramm (Texas) passed a bill with a safe harbor provision that would exempt banks from CRA challenge that have a "Satisfactory" or higher rating; 97% of all banks received Satisfactory or better ratings in l997-98. The bill also includes a small bank exemption from CRA; 63% of all banks would be exempt under this provision. The House Banking Committee passed a financial modernization bill that was CRA neutral. The Community Reinvestment Act has provided the framework to bring bank loans and investments funds into neighborhoods and communities around the country. Without that legal framework, there is no regulatory means of ensuring that funds keep coming to neighborhoods. The unregulated sources of funds will not be seeking business in many of our communities when the economy tightens again. A weakening of CRA via the Senate Banking Committee bill would give communities significantly less leverage to keep bank money back in their neighborhoods. Maintaining the status quo/ failing to expand CRA to include the affiliates that bank holding companies establish will allow financial institutions to move resources away from CRA regulation reducing the leverage of low income communities to attract private dollars for community development.
Comments on CRA should be directed to the following offices: President Clinton (202) 456-1414, the White House, Washington, D.C. 20500 Senator Schumer, Senator Moynihan U.S. Senate, Washington, D.C. 20510 Congressperson _______, House of Representatives, Washington, D.C. 20515

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Predatory Lending:

When is a loan in our community not good news? When it is a predatory loan (i.e., the Bedford Park Organizing Project defines this as the practice of financial organizations actively seeking clients and encouraging them to take loans that they cannot afford to repay.) As we have noted before in Notes, if something sounds too good to be true, it probably is. Therefore, if a broker solicits a loan application promising the world, people should think carefully, read the fine print, consult a lawyer and don’t sign anything. The New York Times and other press have been reporting on the horrors that have befallen homeowners who did not act cautiously and ended up with a severely over-financed home and in danger of foreclosure. (Problems like this are part of the reason that UNHP is sponsoring the April 13 and April 20 Homebuyers Workshops. People interested in finding out more about the predatory lending problem can contact the Northwest Bronx Coalition and the Bedford Park Organizing Project at 563-0740 or UNHP at 933-3101. The Coalition is sponsoring a public meeting on predatory lending on Wednesday, April 21st at 7:30 at the Bedford Park Congregational Church at 201st and Bainbridge Avenue.

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A First Time Home Buyer’s Workshop:
Foreclosed and distressed properties; low down payments and closing cost assistance, home improvement assistance, construction services….our seminar is free.   Find our how Neighbor Works mortgages for purchase renovation can help you own your own home;   Finance the cost of purchase and the cost of renovation;   Mortgage prequalifications available --- FREE.   Don’t Miss our seminar on financing solutions for homes in need of renovation. Seating is limited, so register by April 9th at (718) 933-3101 or (718) 992-5979.   Tuesday, April 13th from 6-9PM in Our Lady of Refuge parish Center at 290 E. 196th Street, 2 blocks east of the Grand Concourse between Bainbridge and Briggs Avenues.
Un Taller para Personas Que Desean Comprar Una Casa por Primera Vez. Propiedades reposeridas y que necesitan reparaciones, Bajo Pago Inicial y Costo de Cierre, Asistencia para la renovacion de su casa, servicios de construcion….y nuestro Seminario es GRATIS. Descubra como las hipotecas de NeighborWorks para reparaciones puede ayudarle a ser dueno di su propia CASA. Como Financiar el Costo de comprar y renovar su casa.   Precualificaciones para Hipotecas, disponible GRATIS.   No se pierda nuestro Seminario de soluciones financieras para las Casas que necesitan renovacion.   Asientos limitados, para reservar asientos llame a (718) 933-3101 or (718) 992-5979, hasta Abril 16.   Martes, Abril 20 6 - 9PM Our Lady of Refuge Parish Center 290 E. 196th Street Entre Bainbridge y Briggs Avenue.

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